If an Investor Is in the 33% Marginal Tax Bracket

question 48

Short Answer

If an investor is in the 33% marginal tax bracket and can purchase a municipal bond paying 7.5%, what would the equivalent before-tax return from a corporate bond have to be to equate the two returns on a before-tax basis?

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Definitions:

Sleeper Effect

A delayed increase in the persuasive impact of a message, where an initially discounted message becomes more influential over time.

Bogus Pipeline

A research technique that tricks participants into believing their true feelings are being measured, thereby encouraging honesty in responses.

Implicit Measures

Assessment tools used to evaluate attitudes, feelings, or beliefs that individuals may be unwilling or unable to report directly.

Explicit Measures

Direct and straightforward techniques to assess attitudes, opinions, or behaviors, often through self-report.